Thursday, June 4, 2015

The IBRC scandal won’t go away

It was
once famously said that a week is a long time in politics. Make that a day. For
weeks the government parties in Dublin have been rejecting any suggestion that
there should be a Commission of Investigation established to look into the
activities of the Irish Bank Resolution Corporation.

Yesterday,
in the face of an increasing storm of popular and political protest the
government did a sharp u-turn and announced the very Commission of
Investigation it has been vigorously and vociferously opposing. Then last night
an email appeared in my inbox from the Minister for Finance, Michael Noonan,
outlining draft Terms of Reference for the Commission and asking for Sinn
Féin’s opinion of them.

It’s
all a far cry from the government’s Programme
for Government four years ago in which the two government parties claimed that
a “democratic revolution” had taken place and that they were committed to
openness and transparency.

The events of the last few days and weeks have exposed
the shallowness of those claims and the disdain in which the government holds
the Dáil and Seanad.

The roots of this current crisis lie in the
nationalisation of Anglo-Irish Bank and Irish Nationwide Building Society and
the creation from them of the Irish Bank Resolution Corporation. Its function
was to sell off assets and reduce the bank debt that the state was taking on as
a result of the economic collapse. Among the assets sold was a company called Siteserv.
The controversial circumstances around this have been at the centre of a very
public debate which for a time last week bordered on a constitutional crisis.

Siteserv had borrowed €150
million from Anglo Irish Bank. IBRC then sold Siteserv to Millington, a company
owned by businessman Denis O Brien. It paid €45.42 million. Tax payers lost
€105 million and shareholders, including chief executives at the company,
received €4.96 million for a busted company. Subsequently Siteserv won the
contract for the imposition of water meters.

In 2012 Pearse Doherty and
I submitted a range of Parliamentary Questions about IBRC. The responses from
government were less than fulsome. More recently Independent TD Catherine
Murphy spent a year asking a series of Freedom of Information questions. She
faced evasion and prevarication. When pressed on RTE about why Catherine Murphy
had to ask 19 Parliamentary Questions before she receved a comprehensive reply
the Minister for Finance Michael Noonan said that the questions were
“adequately answered” and “you don’t produce full files when one specific
question is asked.”

As a result of Teachta
Murphy’s efforts we now know that O'Brien’s company was not the highest bidder
for Siteserv.

We also know that the Minister
for Finance was briefed by Department of Finance officials about their concerns
about this deal and other transactions involving IBRC. For example, €64 million
was written off for Blue Ocean Associates before being purchased by a
consortium, also involving, Denis O'Brien. The government ignored these
concerns.

I raised this issue in the
Dáil with the Taoiseach and demanded that the government establish an
independent Commission of Investigation to look into all these matters. The
government refused and chose instead to appoint the special liquidators, who had
helped close IBRC down, to review all transactions at IBRC over €10 million.
The liquidators are from KPMG auditors which oversaw the sale of Siteserv.

Sinn Féin and others on the
opposition were justifiably angry at an ‘insider’ review process that was less
than transparent and involved the same individuals and company involved in the
original sale of Siteserv.

RTE then acquired information on Denis O Brien’s
dealings with IBRC. O’Brien, reputedly Ireland’s richest businessman, went to the
High Court to prevent the information from being broadcast. On May 18th
he successfully secured an injunction against RTE, or any other Irish media,
carrying any of the detail of his private financial dealings with IBRC. The
media was effectively gagged.

Last Thursday, May 28th, Catherine Murphy introduced
a Private Members Bill into the Dáil. It was supported by 45 TDs including Sinn
Féin. The purpose of the Comptroller and General Auditor (Amendment) Bill was
to try and ensure that IBRC would be subject to independent scrutiny by that
agency and not by the ‘insiders’ who had been appointed by the Minister for
Finance and who were part of the original sale by IBRC of Siteserv and other
companies. Ms Murphy told the Dáil: “It
is a web of connections and conflicts that requires outside eyes to unravel.”

The Independent TD also used parliamentary privilege to
read into the record of the Dáil her understanding of the details of Mr.
O’Brien’s arrangements with IBRC which were the subject of the court injunction.
These were published in the Dáil record several hours later and are available
online at www.oireachtas.ie

The media interpreted the court injunction as a bar on
the carrying by it of any report of Catherine Murphy’s remarks. Mr. O’Brien
claimed her information is wrong. Ms Murphy defends her sources.

Article 15, section 12 of the Irish constitution is
very explicit in its endorsement of Dáil privilege and the right of those to
publish remarks made within the Oireachtas. The court injunction and refusal of
the Irish media to publish Teachta Murphy’s remarks for a time created a
political furore and a significant constitutional crisis.

On Tuesday the legality of the issues were back for
debate in the High Court where Mr. Justice Binchy confirmed that it was never
his intention to silence TDs in the Dáil or to inhibit the media in reporting
on matters arising in the Dáil. So, absolute Dáil privilege has been restored.

But the whole affair has raised a number of important
issues of concern.

Firstly, neither the Taoiseach Enda Kenny nor the
government demonstrated any leadership on this issue. No one from the
government rushed to defend the rights of the Oireachtas and of Oireachtas
members. They did not ask the Attorney General to clarify the issue of Dáil
privilege nor did they go to court to assert it. The government left it to the
media. A clear abdication of their constitutional and political responsibility.

Secondly, the government refused my request and that
of other TDs to recall the Dáil to debate this very important matter of public
concern.

Thirdly, the issue which gave rise to this controversy
has not been resolved. The decision by the government to eventually concede a
Commission of Investigation into IBRC is only part of the answer to this. I
have written to the Taoiseach setting out a range of suggestions for
strengthening the ability of the Commission of Investigation to get to the
truth.

I am not hopeful that this government, which like
Fianna Fáil before it, never takes on board what opposition parties propose,
will do the right thing and amend the Terms of Reference accordingly. If it
fails to do this then the Commission risks not having the confidence of the
Oireachtas or of the public.

The Commission of Investigation must have
the power to examine the political oversight of IBRC by the Minister for
Finance and the Department of Finance.The
government is trying to distance itself from all of this and from the
Commission of Investigation. That is not good enough.

The
Commission must also be allowed to review transactions, activities and
management decisions involving KPMG in its role as special liquidator; and the
government’s 31st December timeframe for completion of the
report is unacceptable. There is understandable concern that there may be an
election called between now and 31st December. The
Investigation should be tasked to produce its report no later than 31st October
2015.

Fourthly, for those tens of thousands of families who
are struggling to pay mortgages, or who cannot pay and live under the threat of
eviction, and those small businesses who can’t get credit from the banks, all
of this is evidence of the government’s differential treatment of banks and of
the elites. Owe thousands and the state and the banks will relentlessly and
ruthlessly pursue you. Owe millions and kid gloves are used.

The same concerns also exist around theNational Asset Management Agency (NAMA). It also has been handling
billions in debts arising from the economic crash; mainly from the collapse of
the construction industry. There is a lack of transparency here also.

And finally there is the a lá carte attitude of
sections of the media and of some in the Dáil to the issue of Dáil privilege.
Mary Lou McDonald named former politicians in the Dáil last November with
alleged links to off-shore accounts following information released by a
whistleblower.

She was pilloried by some of those, especially in
Fianna Fáil and the government parties, who have been vocal in recent days defending
Dáil privilege in respect of Catherine Murphy. The Fianna Fáil Chief Whip SeánÓ Fearghail went so far as to report her to
the Committee on Procedures and Privileges.

It would appear that here is one law for those who
aren’t electoral competitors and another for those who are. Either Oireachtas
members have absolute privilege or they don’t.

The Committee on Procedures and Privileges came out
against Mary Lou. No surprise there. How will they respond, in light of the
media’s rush to the High Court to defend freedom of speech, to accusations by
some, including Denis O’Brien, that Catherine Murphy similarly abused
privilege?